Bombardier and Russia’s Rostekhnologii Execute Series of Agreements; at Least 100 Bombardier Q400 NextGen Aircraft Being Considered

August 28, 2013Moscow
Aerospace,
Press Release

Parties sign a letter of intent for the sale of 50 Q400 NextGen aircraft for Russian operators

Also enter into a market development agreement for the potential placement of at least 50 additional Q400 NextGen aircraft in the region

Execute a memorandum of understanding that could add a Q400 NextGen aircraft final assembly line in Russia

Bombardier and Rostekhnologii (“Rostec”), a state corporation controlled by the Russian Federation, today announced that they signed a series of preliminary agreements that include a letter of intent (LOI) for the sale of 50 Q400 NextGen aircraft; and a Market Development Agreement reached with Rostec and its aircraft leasing subsidiary, Avia Capital Services, that will provide an opportunity to place at least 50 additional Q400 NextGen aircraft in the region. The parties also concluded a memorandum of understanding (MOU) to validate the opportunity to set up a Q400 NextGen final assembly line in Russia.

The LOI, Market Development Agreement and MOU were signed at the 2013 International Aviation and Space Salon, known as the MAKS 2013 Air Show, held at Moscow’s Zhukovsky Airport. Should definitive agreements be reached, based on the list price of the Q400 NextGen airliner, a firm-order contract for 100 Q400 NextGen aircraft would be valued at approximately $3.39 billion US.

The establishment of a Q400 NextGen aircraft final assembly line in the Russian Federation, as outlined in the MOU, is a key commercial requirement of both the LOI and the Market Development Agreement. Under the MOU, Bombardier and Rostec will validate the opportunity to set up a Q400 NextGen final assembly line in Russia that would be managed by a joint venture between the two parties.

Should definitive agreements be reached, a Q400 NextGen aircraft final assembly line in Russia would produce aircraft for Russian customers and would be incremental to Bombardier’s current Q400 NextGen aircraft production operations in Toronto, Canada. Bombardier and Rostec are working towards definitive agreements to be concluded in 2014, subject to obtaining the required internal, governmental and third-party approvals, as well as other usual conditions.

“The implementation of this project with our potential partner, Bombardier, will contribute to the fleet renewal of our airlines, as well as to improve flight safety and reduce fares on regional routes. We are entering an important stage of validation towards formalizing the creation of this joint venture that will lay the foundation for the future of Russian turboprop aviation,” noted Alexey Fedorov, Managing Director, Aviation Projects, Rostec.

“We recognize this as a landmark opportunity for the Q400 NextGen aircraft program. This aircraft is ideally suited for airlines operating within the geographically diverse Russian Federation and the neighbouring regions where, together with Rostec, we are forecasting a 144 per cent growth in demand for 60- to 99-seat turboprops over the next five years,” said Mike Arcamone, President, Bombardier Commercial Aircraft. “Developing local roots in strategic markets is at the core of Bombardier’s strategic framework, and we have identified Russia as being key to our growth and sustainability. The agreements signed today are the next step towards ensuring our long-term competitive position in the Russian Federation and will help secure Rostec’s ongoing establishment of an aviation centre of excellence,” he added.

There are currently more than 120 Bombardier commercial aircraft in-service in Russia and the Commonwealth of Independent States (CIS), and over the next 20 years, Bombardier forecasts a market demand of approximately 400 aircraft in the 20- to 99-seat market in the region.

About Q400 NextGen aircraft
The Q400 NextGen turboprop airliner is the most recent development in the evolution of the Q400 aircraft, and the advanced successor to Bombardier’s Dash 8/Q-Series family of aircraft. Optimized for short-haul operations, the “comfortably greener,” 70- to 80-seat Q400 NextGen aircraft is a large, fast, quiet and fuel-efficient turboprop. It provides an ideal balance of passenger comfort and operating economics with a reduced environmental footprint.

Bombardier has booked firm orders for 475 Q400 and Q400 NextGen aircraft. Worldwide,Q400 and Q400 NextGen aircraft have transported more than 243 million passengers and have logged over 4.2 million flight hours and more than 4.5 million take-offs and landings in service with close to 50 operators in over 30 countries on five continents. In June 2012, the aircraft received Aircraft Type Approval from the Interstate Aviation Committee to operate in Russia and the Commonwealth of Independent States.

About Bombardier

Bombardier is the world’s only manufacturer of both planes and trains. Looking far ahead while delivering today, Bombardier is evolving mobility worldwide by answering the call for more efficient, sustainable and enjoyable transportation everywhere. Our vehicles, services and, most of all, our employees are what make us a global leader in transportation.

Bombardier is headquartered in Montréal, Canada. Our shares are traded on the Toronto Stock Exchange (BBD) and we are listed on the Dow Jones Sustainability World and North America Indexes. In the fiscal year ended December 31, 2012, we posted revenues of $16.8 billion. News and information are available at bombardier.com or follow us on Twitter @Bombardier.

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